Related Breaking News

• Driven by an aging populace’s desire to maintain the appearance of youth, US demand for cosmeceutical products is expected to increase 5.8% per annum to $8.5 billion in 2015, according to new data from The Freedonia Group, a Cleveland-based market research firm.

The target market for cosmeceuticals continues to expand beyond the traditional 45-years-and-older demographic to include much younger individuals, as the national obsession with youth continues and focus shifts to products intended to stave off the first signs of aging. Limiting further gains will be growing pricing pressures due to the expanding market penetration of private label brands and the rapid commoditization of innovative ingredients and products. Additionally, cosmeceuticals face intense competition from alternative treatments, such as cosmetic surgery.

The chemicals used in cosmeceutical products provide a competitive advantage by which product manufacturers differentiate their products. Gains will be spurred by the use of new, value-added active ingredients in product formulations, noted Freedonia. Antioxidants will remain the largest category, with above-average gains promoted by their incorporation into both topical and ingestible formulations. Botanicals will continue to see the fastest gains in demand as consumers continue to favor “natural” products.

Injectables and skin care products will experience the fastest growth, based on anti-aging benefits. Brands such as Allergan’s Botox Cosmetic and Juvéderm have been essentially synonymous with injectables since their introduction, and will continue to lead growth going forward, the company said. The first direct competition to Botox emerged in 2009 with the FDA’s approval of Dysport, which will help to reshape the injectables market. Also, relatively new hyaluronic acid-based dermal fillers will see particularly fast growth.

In addition to achieving above-average growth, skin care products will remain the largest product category, set to account for 64% of all cosmeceutical product demand in 2015. Age-defying products will achieve the fastest gains in the segment, driven by a highly receptive, expanding group of graying “baby boomers,” who want to redress visible damage to the skin caused by aging, ultraviolet radiation and other environmental stressors, as well as a growing number of younger individuals seeking to prevent signs of aging.

More info: www.freedoniagroup.com

Is Walmart’s ReignAs Price King Over?

• The Walmart shopper’s value perception has dramatically changed, according to a new research report from to WSL/Strategic Retail that surveyed nearly 1,500 Walmart shoppers. A continuing recessionary mindset, coupled with lower priced competitors, are driving shoppers to other retail destinations, according to the New York firm’s “How America Shops” report.

At the same time, consumer product companies and other manufacturers need to analyze their exposure and re-evaluate the way they do business with Walmart. The world’s largest retailer is certainly not going to disappear, however, it will no longer dominate the U.S. retail landscape the way it once did, noted WSL.

“Our report suggests that Walmart needs to better address the demands of its shopper today in order to regain relevance,” said Wendy Liebmann, CEO of WSL/Strategic Retail.

Findings of the report include:

• The price king has been toppled. 86% of Walmart shoppers no longer believe that Walmart has the lowest prices. Every brick and mortar retailer lowered prices and shouted sales throughout the recession, while the internet became the go-to place for shoppers in search of the lowest price. If Walmart no longer stands for everyday low price (EDLP), what does it stand for?

• Where did the Walmart shopper go? The Walmart Shopper is finding better shopping elsewhere, including dollar stores, supermarkets, and other mass merchants. The recession accelerated shoppers’ respect for the dollar stores. Walmart shoppers, particularly its most frequent shoppers, agree that dollar stores have lower prices than Walmart, more national brands than they used to carry, are nicer to shop, and are more accepted by everyone as they are now mainstream.

• The recession is not over for Walmart shoppers. 82% of the retailer’s shoppers say they haven’t seen any improvement in their financial situation in the past year, and 70% don’t expect their finances to get better next year. The economic downturn, credit crunch and higher gas prices, among other factors, squeezed the discretionary spending out of the wallets of Walmart shoppers.

More info: www.wslstrategicretail.com

Higher Income ShoppersLike Beauty Bargains

• According to a recent report from Mintel, 64% of women in the $100K-$149K income bracket plan to continue buying some store brand/private label color cosmetics and some brand name color cosmetics, meanwhile, only 50% of those in the $50K-$74K and 48% in the $75K-$99K bracket say the same thing.

“This does not mean higher income women do not purchase higher end, national brands,” noted Kat Fay, senior beauty analyst at Mintel. “But they can be selective, often spending more on one category or occasion than another.”

A third of Mintel respondents say they are buying store brand/private label cosmetics more now than they did this time last year. Not surprisingly, more than half (51%) purchased private label because it offered the best value for the money. Depending on the product, some can be as much as 30-40% cheaper than name brand cosmetics.

Meanwhile, 33% were motivated to try a private label cosmetic because of a coupon or special offer and 26% of shoppers went on a recommendation from a friend or family member.

“In addition to recommendations and advertising, shoppers are influenced by in-store cosmetic demos,” added Fay. “Demos show a product in action, teach shoppers how to properly use an item and allow them to ask pertinent questions. Retailers say demos always spur sales.”

For those who don’t purchase private label color cosmetics, nearly half (49%) say they are happy with their brand name product and have no desire to try anything new, 32% say they never thought to try something else and 18% fear that store brands use cheap or inferior ingredients. This offers an opportunity for marketers to educate consumers on the quality of their products and ingredients.

More info: www.mintel.com

PLMA Says Store BrandsShow 35% Savings

• A new pricing study that compared a summer shopping basket of store brands versus national brands shows that consumers can save more than 35% off their grocery bill, on average, by opting for a retailer’s brands.

The research, conducted by the Private Label Manufacturers Association (PLMA), looked at a range of basic food and non-food items that an average family might put on the shopping list during the summer season.

The study results indicate that consumers who choose the retailer’s brand for products on the list rather than the national brand could save, on average, $44.04 off their total market basket—a savings of 35.7%. When buying national brands, the total bill came to $123.23 on average over six separate trips, while the same purchases for the retailer’s brands cost $79.19.

Store brands during the past decade have experienced unprecedented growth and consumer acceptance according to industry statistics, gaining 40% in supermarket sales alone, according to PLMA. The products today account for nearly one in four grocery products sold.

In a recent survey of consumer’s attitudes toward store brands conducted for PLMA by GfK/Roper, more than half of the respondents described themselves as frequent store brand shoppers, while eight out of 10 said that they believe the store brand products they buy are either equal to or better than the national brands.